Beasley Broadcast Group Inc.

Overview Key strengths Key risks At least 20% market share in its top five markets. S&P Global Ratings-adjusted gross leverage will likely remain well above 7x over the next several years absent voluntary debt repayment. Small scale and geographic concentration among the company's radio stations. Intense competition from other radio broadcasters and alternative media. Operating performance is susceptible to economic cyclicality. We anticipate broadcast radio industry revenues will decline 10% this year as advertisers pull back on spending as elevated inflation and interest rates eat away at consumers' purchasing power. Since Beasley generates over 80% of its revenue from broadcast radio advertising, we expect its S&P Global Ratings-adjusted leverage will increase to 10.5x in 2023 from 8.1x in 2022. We

...We view Beasley Broadcast Group Inc.'s capital structure as unsustainable. We anticipate broadcast radio industry revenues will decline 10% this year as advertisers pull back on spending as elevated inflation and interest rates eat away at consumers' purchasing power. Since Beasley generates over 80% of its revenue from broadcast radio advertising, we expect its S&P Global Ratings-adjusted leverage will increase to 10.5x in 2023 from 8.1x in 2022. We expect the company's leverage to decline in 2024 to the high-7x area as macroeconomic conditions improve and political revenue increases due to the U.S. presidential election. However, with leverage elevated well above 6x over the next few years, we expect Beasley will have difficulty refinancing its 2026 senior secured notes. Despite this, we believe it will maintain sufficient liquidity for at least the next two years. As of March 31, 2023, Beasley had a cash balance of approximately $36 million. This liquidity will help the company fund...

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